Propane dealer says high prices may ease within a month - KTIV News 4 Sioux City IA: News, Weather and Sports

Propane dealer says high prices may ease within a month

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BATTLE CREEK, Iowa (KTIV) -
BATTLE CREEK, Iowa (KTIV)- Propane heaters in rural areas typically heat a home for a little over a dollar a gallon.
"It's still a very inexpensive, viable product," Henry Jessen, owner of Johnson Propane said.
 
But in the last three weeks, an extreme propane shortage has driven that cost up to as high as five dollars a gallon.
"It's a concern that has to be addressed," Jessen said.

Henry Jessen, owner of Johnson Propane in Battle Creek, Iowa, says this year's propane costs are the result of a perfect storm. 
The wet summer drove up the use of propane as farmers dried their crops, and the frigid winter temperatures are increasing propane use as home owners try to stay warm."Not only is the homeowner affected, but a lot of these propane companies are mom and pop operations. So they're stressed with their supplier for product," Jessen said.

He says there's plenty of American propane to go around, but propane suppliers have already exported a lot of the propane for use overseas."With what's going on with oil production in the United States, there's going to be a glutton of propane, natural gas, and crude, basically. The problem is, they have to have a place for that. So if we don't use it stateside, it gets shipped overseas," Jessen said.

The Federal government is flowing money to the Midwest for fuel assistance, trying to aid those who can't afford their higher heating costs, and suppliers are turning ships around in the middle of the ocean to bring the propane back stateside."The market is high enough in the Midwest that they can make more margin here than they can even sending it to China and paying a penalty. There's an abundance of product, it's just that it's not in the right places right now," Jessen said.

As supply has gone down and the cost has gone up, Henry Jessen says that working through the propane crisis has been a trying time for everyone. But their priority list throughout the crisis hasn't been about the cost of the product, it's been about the consumer.
"Our goal was basically that everybody who buys from us, as far as clientele, are going to stay warm," Jessen said.

As some of those propane shipments turn back towards the United States, Jessen says everyone is hoping this crisis is short-lived. He also said as those propane supplies come back our way, he sees the propane crisis easing at the very least within the next month.
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